Levi Strauss & Co. (NYSE: LEVI) saw its shares dwindle, a day after the jeans giant announced financial results for the second quarter, and updated annual guidance.
Second-quarter net revenues grew 5% on a reported basis and 9% on a constant-currency basis, excluding $44 million in unfavorable currency
effects.
The company's direct-to-consumer business grew reported revenues by nine percent in the second quarter, primarily due to performance and expansion of the retail network and e-commerce growth.
LEVI had 78 more company-operated stores at the end of the second quarter of 2019 than it did a year prior. The company's wholesale business grew reported revenues by three percent, reflecting growth in all the regions.
Second-quarter net income decreased $49 million, primarily due to $29 million of costs associated with the company's initial public offering (IPO), inclusive of $25 million of underwriting commissions paid on behalf of the selling stockholders.
Second-quarter Adjusted EBIT dropped 4% reflecting unfavorable currency, but grew three percent on a constant-currency basis, despite planned higher advertising and promotion expense.
The company's expectations for fiscal 2019, as compared to fiscal 2018, consist of constant-currency net revenues growth being at the high end of the mid-single digit range; and constant-currency Adjusted EBIT margin slightly up in the range of 10 basis points
Said CEO Chip Bergh, "Our second-quarter and first-half results reflect the continued strength of our diversified business model as we delivered broad-based growth across all brands, regions and key product categories despite a challenging retail and macroeconomic environment."
Strauss shares fell $1.79, or 7.5%, early Wednesday to $21.87
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